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BY JACKSON DAY
CHAIR, BWC BOARD OF PENSIONS

A new health benefit program for Baltimore-Washington Conference retirees who are Medicare-eligible will go into effect Jan. 1, 2013. If you are in this group, on that day your health insurance will be from a company of your own choosing and tailored to your own needs.

You will have selected the company during the months before in conversation with a counselor from Extend Health, the conference’s new contractor for retiree benefits. The Conference Board of Pensions and Health Benefits provided information in May about the program at the annual conference session, where it was endorsed.

The benefiits will be paid for by funds the conference has put into your own family Health Reimbursement Account.

You can learn more about the program at one of four regional briefings scheduled for retirees on Sept. 11 and 12.

Extend Health is a program promoted by the United Methodist General Board of Pensions and Health Benefits. Two conferences are already using the program, and seven additional conferences, including the Baltimore-Washington Conference, will begin on Jan. 1. The Conference Board of Pensions was delighted to discover the program, which promises to provide, on the average, better health coverage for participants, while saving both participants and the conference money.

This is possible with the cost-savings involved when one selects a plan that is tailored to one’s own unique needs. Here are some examples of how it works:

Adams, Brown and Carroll talk with the Extend Health Counselor and each select a plan. It happens that both Adams and Brown select Plan A which is low premium, high co-pay. Carroll selects Plan B, which is high premium, low co-pay.

Adams has 30 years of service as Baltimore-Washington Conference clergy, so he receives the maximum conference contribution of $3,000 per year to his Health Reimbursement Account (HRA). Plan A’s premiums of $200 per month are taken from his Health Reimbursement Account, with some left over, which Adams can use to reimburse some of his out of pocket costs for doctor visits and medicines.

Brown has 11 years of service, just over the floor of 10 years, and so she receives the minimum conference contribution of $300 per year to her HRA. Under the previous plan, her few years of service would also have resulted in a large premium; under both plans the payments are graduated according to number of years of credited service.

Her premiums exhaust the HRA rapidly, and she pays the rest of the year out of pocket. Brown is pleased, however, with the opportunity to participate in Extend Health, to receive the good advice of the counselor and to get the supplemental Medicare policy.

Carroll selected Plan B. Like Adams, Carroll receives the maximum conference contribution of $3,000 per year. But having chosen Plan B, whose premiums are $400 per month, his HRA is also exhausted before the end of the year, and he pays the remaining premiums out of pocket. Since the plan is what he felt he needed, however, he knows it’s appropriate to pay the higher amount.

One reason that Adams, Brown and Carroll all feel fortunate is that out-of-pocket costs paid personally under the old plan totaled several thousand dollars on the average. These costs are anticipated to be lower, and some of them may be paid out of the HRA with the conference contribution.

Assuming that Adams, Brown and Carroll are married, they each would have received an additional conference contribution to their HRA equal to their own. Because the money goes into the same family HRA, if one spouse’s expenses are higher than the other’s, the money can be used for either one.

Meanwhile, there are the other benefits. Under the old plan, health care costs have been rising each year at a rate that could not be sustained, and the conference’s “unfunded liability” was becoming more and more worrisome.

In the end, since the employer share of retiree health benefits are paid by the conference and not the congregation, making up those funds would have required an increase in apportionments to the congregations.

Because of its money-saving features, Extend Health reduces the conference’s “unfunded liability” amount to one that does not threaten to burden already over-extended congregations.

With any new program there will be glitches, and we all know that “the proof of the pudding is in the eating.” Say a prayer that the new program will be implemented with a minimum of confusion, and that it proves to accomplish what it has been heralded to do.

The Rev. Jackson Day is chair of the conference Board of Pensions and Health Benefits, pastor of Providence UMC in Towson, and a consultant for health care advocacy with The United Methodist General Board of Church and Society in Washington.